The big data event of the session was the release of Australian CPI data, which was tagged by the RBA to be a final indicator as to whether a rate hike in August could be warranted by the central bank. Australian CPI came in at 0.6%, lower than the expected 1.0%, thus dashing the hopes of an August rate hike. The following drop in the Aussie dollar was brutal, as the AUD/USD fell from 0.9020 to subsequent lows of 0.8920. AUD/NZD found itself just under the 1.2210 level after only minutes prior it was perching near 1.2330, and AUD/JPY did a straight line decline from 79.05 to 78.55, with an eventual bottom at 78.25. Australian interest rates are still the highest of the major currency pairs, currently at 4.50%.
Throughout the rest of the currency spectrum trading was range bound and orderly, with the USD/JPY stuck between 87.65 and 87.85, and GBP/USD moving between 1.5560 and 1.5590 ahead of a speaking engagement from the Bank of England’s Mervyn King due up later in London’s session. XAU/USD was uninspired between $1160.00 and $1165.00 per ounce and BCO/USD keep its moves within a $1 between $76.85 and $77.72.
Some top tier data due ahead in the US with durable goods orders and beige book data on deck. New Zealand starts the Asian session off early with the RBNZ Rate Decision which is foreseen to be a hike of 0.25% to bring the island nations overnight rate to 3.00%.